Such a thing
would have been unthinkable a few years ago. But Toyota officials
say Michigan is among the states being seriously considered for
a massive new engine plant. And Michigan’s Democratic Gov.
Jennifer Granholm, up for reelection next year, has made clear
she will spare no effort to make it happen, despite her party’s
long antipathy to things Japanese.
It wouldn’t
be the first foreign auto presence on Michigan soil. Toyota already
has a technical center near Ann Arbor, and is committed to adding
a $150 million design center. Other Japanese, Korean and European
automakers and their suppliers also have facilities of varying
scale in Michigan. But actual manufacturing would mean lots of
jobs – at least until China’s auto industry does to
the Japanese what the Japanese auto industry did to the American.
Toyota may
only be stringing the governor along as part of the usual effort
to excite some competitive bidding for the plant among the states.
But there are reasons to think Toyota is serious. For one thing,
it already operates in 14 states. Adding Michigan to its stable
could greatly minimize the political backlash if General Motors
or Ford goes down the tubes. Moreover, the unions, or at least
their leadership, are showing signs of gradually accommodating
themselves to global reality:
A new DaimlerChrysler
engine plant 60 miles from Detroit, for example, will operate
with a single work classification, providing the same flexibility
that Asian automakers have long enjoyed. It’s thus not inconceivable
that Toyota would accept a union shop under the sort of “modern”
contract towards which the Big Three are fitfully struggling.
After all,
Toyota’s first manufacturing facility in the United States,
built in 1986, was a unionized but “lean” facility
in which GM was a partner.
The issue
has never been union wages. According to a recent study by the
Center for Automotive Research in Ann Arbor, Toyota’s compensation
for its existing U.S. manufacturing workers averages about $63,000
a year, the same as the Big Three. (The average U.S. job pays
about $27,000 a year.) But with a much younger work force, Toyota
has so far avoided the “legacy” pension and health
costs that are killing the Big Three.
Toyota has
indicated no decision is imminent. A threatened strike by the
UAW against bankrupt Delphi, which has threatened draconian wage
and benefit cuts, could scare off Toyota. UAW militants also are
threatening to put out a big stay-away sign at next weekend’s
auto show if they carry out a planned protest against any effort
to contain costs.
And the state
supreme court – rightly if inconveniently – has ordered
a review of the deal under which the state awarded Toyota 690
acres of choice land for its design center even though there was
a far higher bid on the table from a local developer.
It’s
also legitimate to wonder why Michigan tax dollars should go to
Toyota when local companies are struggling to survive. Far better
would be a deep tax cut for all – and then let the forces
of competition sort out the winners and losers. But the governor
insists that a general tax cut would require matching cuts in
spending, which she then denounces as a mean-spirited idea.
Which goes
far to explain why she is having to chase Toyota in the first
place.
